Top telecom cos eye business deals here

NEW DELHI: The next two months will see top executives of the world���s largest telecom equipment vendors such as Ericsson, Nokia Siemens Networks (NSN), Alcatel-Lucent, Huawei and ZTE descending on India, with an eye on several billion dollars worth of business deals coming up for grabs in the next six months.

"It is quite natural for them to converge in India which is probably the only large growth market in the world at present," said BK Syngal, senior principal, Dua Consulting, and former chairman of VSNL, adding that the total business on offer could be worth $25-30 billion over the next two years.

The world���s top five telecom gear makers have been battling to bag deals in India, where several new operators are launching services, even as existing ones are expanding their networks. Besides, the 3G spectrum auctions scheduled for early January 2010 will result in huge network orders from domestic players.

In case of NSN, which is battling falling sales globally, its new CEO Rajeev Suri, top executives and its entire board will spend close to a week in India. NSN is not the only telco that is having a board meet in India. Chinese equipment major ZTE also plans to host its next board meeting here and its top executives, led by its president and CEO Yan Yimin, are slated to be in India before December-end.

The current CFO and executive vice-president of the world���s largest telecom gear marker LM Ericsson, Hans Vestberg, who is set to take over as CEO of the Swedish firm from January 1 next, will also be seen in Delhi next month. Ben Verwaayen, CEO of Alcatel-Lucent, the world���s third-largest telecom gear vendor, is also headed to India in early November, an executive with the company confirmed to ET.

A Huawei executive said the company���s chairperson is also likely to be in India before November-end. Indian market, with mobile penetration of just 40% adding an average 13 million subscribers every month, provides the single-biggest opportunity for global telecom vendors.

For instance, BSNL���s latest tender for 93 million lines was worth $8 billion and the PSU is currently engaged in awarding this contract to Ericsson and Huawei. NSN was disqualified from this BSNL tender on technical ground.

Besides, India���s largest mobile service provider Bharti Airtel���s over $2 billion network outsourcing contract will be up for grabs soon, as its existing deals with Ericsson and NSN come up for renewal in early 2010. Bharti Airtel executives had earlier told ET that Ericsson and NSN will have to compete with other potential bidders for a renewal of deals.

ZTE India���s chairman and managing director DK Ghosh refused to comment on the board meeting. "India has become the second-largest market for us outside China and accounts for 10% of our global revenues. Earlier, India was part of the Asian region for us, but we have now made it a separate region," he said. ZTE���s annual sales in India have crossed $1-billion mark last year.

An Ericsson executive clarified that Hans Vestberg would be part of the delegation accompanying the Swedish prime minister to India. "Mr Vestberg���s visit is not related to the executives from other vendors coming here," he said. NSN is the process of making India the nerve centre of its business.

Two of its three global network centres from where it manages all infrastructure of telecom companies across countries is located in India. Last year, NSN shifted its global services business unit headquarters from Munich to Noida and this unit now contributes over 40% of the company���s revenues.

Prior to taking over as CEO of NSN earlier this month, Mr Suri was heading the company���s global services business from Noida. In the past four months, NSN has been bagged multiple deals from Unitech Wireless (Telenor) to roll out its mobile network, a contract from Idea Cellular to upgrade the telco���s network across India and also entered into an agreement with for Vodafone Essar for building infrastructure for the Indian telco in seven circles.

Alcatel-Lucent too has witnessed a huge revival in its fortunes in the Indian domestic market. The company is in the race to buy out troubled state-owned telecom equipment maker ITI and is also the front runner to bag both Bharti Airtel���s and Reliance Communication���s (RCOM) upcoming contracts to manage and maintain their optic fibre cable networks.

Both these contracts are estimated to be worth over $500 million each. In April 2009, Bharti had awarded Alcatel-Lucent a $500 million deal to manage its landline and broadband business. Last year, Alcatel-Lucent had entered into an network outsourcing deal with RCOM and the value of this contract has already exceeded $1 billion.

Over the last 12 months Chinese vendors ZTE and Huawei, have beaten Western vendors to walk away with a significant portion of the new network outsourcing deals. RCOM and Tata Teleservices has outsourced part of their GSM network management to Huawei which has also bagged network rollout contracts from BSNL, Datacom, Aircel and Unitech Wireless. ZTE recently tied up with Loop Telecom for its GSM rollout while also picking up large orders from Sistema Shyam and Unitech Wireless.